Innovationsmanagement und Entrepreneurship Michael Migendt Accelerating Green Innovation Essays on Alternative Investments in Clean Technologies Innovationsmanagement und Entrepreneurship Herausgegeben von R Gleich, P Spieth, F Täube, Oestrich-Winkel, Deutschland In unserer Schriftenreihe „Innovationsmanagement und Entrepreneurship“ werden wichtige Ergebnisse der wissenschaftlichen und praxisorientierten Forschung des Strascheg Institute for Innovation and Entrepreneurship (SIIE) der EBS Business School veröffentlicht Our series includes excellent academic and practitioner oriented research in the area of innovation management and entrepreneurship which has been recently conducted at EBS Business School, Strascheg Institute for Innovation and Entrepreneurship (SIIE) Herausgegeben von Prof Dr Ronald Gleich, Prof Dr Patrick Spieth, Prof Dr Florian Täube, EBS Business School, EBS Universität für Wirtschaft und Recht, Strascheg Institut für Innovation und Entrepreneurship (SIIE), Oestrich-Winkel, Deutschland Michael Migendt Accelerating Green Innovation Essays on Alternative Investments in Clean Technologies Foreword by Prof Dr Ronald Gleich Michael Migendt Oestrich-Winkel, Germany Dissertation EBS Universität für Wirtschaft und Recht – EBS Business School, OestrichWinkel, 2015 Innovationsmanagement und Entrepreneurship ISBN 978-3-658-17250-3 ISBN 978-3-658-17251-0 (eBook) DOI 10.1007/978-3-658-17251-0 Library of Congress Control Number: 2017931354 Springer Gabler © Springer Fachmedien Wiesbaden GmbH 2017 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Printed on acid-free paper This Springer Gabler imprint is published by Springer Nature The registered company is Springer Fachmedien Wiesbaden GmbH The registered company address is: Abraham-Lincoln-Str 46, 65189 Wiesbaden, Germany Fore ord The work of Dr Michael Migendt focuses on the role of regulation and the influence of private investors in the development of clean technology markets in the USA and Europe Core to those are for example wind and solar energy technologies that enable a sustainable use of the earth’s resources A special topic of this work is the changing role of finance and policy along the cleantech innovation chain These two main topics in Mr Migendt’s work were embedded in a research initiative of the German federal government (supported by the federal Ministry of Education and Research) with the title "Climate Change, Financial Markets and Innovation" (CFI) This initiative focused on diverse questions in the field of clean technology markets like innovation, regulation & policy making as well as finance Alternative investments were core of the research activities at the Strascheg Institut for Innovation and Entrepreneurship (SIIE) within the BMBF research project These are commonly known and applied as private equity and venture capital finance The present work was one of three dissertation projects at my institute at the EBS Universität für Wirtschaft und Recht in the foresaid context and has its special focus on “green policy for green innovation” with another focus on the commercialization phase of innovations The other dissertations in contrast focus on the earlier innovation phase (generation - Dissertation Dr Friedemann Polzin) respectively later innovation phase (diffusion – Dr Florian Schock) The work of Dr Michael Migendt is valuable source of advice for researchers, policy makers and investors regarding to innovation, investments and clean technology activities Prof Dr Ronald Gleich Ac no ledgements years – universities – co-authors – countries – 100s of intervie s – 100,000s of articles – dissertation This dissertation represents the outcome of my research work conducted at the Strascheg Institute for Innovation and Entrepreneurship (SIIE) at EBS Universität für Wirtschaft und Recht in Wiesbaden I am very thankful to all those that have supported me throughout this time and happy to conclude my thesis not only with a degree, but with many valuable new friendships and memorable experiences First of all, I am indebted to Prof Ronald Gleich for his support, advice, and the academic freedom he provided during my time at SIIE I would also like to thank Prof Florian Täube for being my key research advisor and co-author of my papers His ideas, guidance and priceless connections to the academic world made this thesis and accompanying projects possible My thesis would also not have been possible without the support of the Climate Change, Financial Markets and Innovation (CFI) research project funded by the German Ministry for Research and Education (BMBF) As head of the CFI research project, a special thank you to the Director of the Sustainable Business Institute (SBI) and co-author of my research papers, Dr Paschen von Flotow, whose advice, industry insights and experiences proved to be invaluable for the success of this dissertation My special appreciation and thanks go to my co-authors Dr Friedemann Polzin and Dr Florian Schock Through strong collaboration, innumerable hours of interviewing, analyzing and data crunching, as well as, lots of inspiring discussions we managed to complete a challenging research project and our dissertations A big thank you to Prof Brett Gilbert from Rutgers University, who is not only my coauthor but also an inspiring role model for my academic work Her valuable input, innovative approaches and comprehensive knowledge pushed our common work forward I am very grateful to Prof Zhang Wei and Prof Steven White from Tsinghua University - School of Economics and Management, who hosted me during my VIII Acknowledgements research stay in Beijing and not only offered me generous support and valuable insights, but also integrated me in the research culture at Tsinghua University My sincere thanks to Prof Martin Kenney and Don Patton from the University of California, Davis - Department of Human Ecology who hosted me during my research stay in California and offered academic insights, help with the last mile of my dissertation and made me feel remarkably welcome A special thank you to all my colleagues at SIIE and SBI Their support, companionship, time for a talk and a laugh have been indispensable Thank you to the discussion partners all over the world who took their time to support our research and provide us with unparalleled insights in the world of finance, innovation and clean technologies Key to this dissertation were also my friends who supported me throughout this time Many thanks to them Finally, I cannot express in words how grateful I am towards my family who have made this dissertation possible and supported me throughout the years Thank you Michael Migendt Table of Contents Fore ord Ac no ledgements II Table of Contents I ist of Figures III ist of Tables ist of Abbreviations II Introduction 1.1 Motivation, purpose and scope 1.2 Research context 1.3 Research questions and methodology Emergence of Cleantech as an Investment Category - Media Attention and enture Capital Investment 2.1 Introduction 2.2 Theory 11 2.3 2.4 2.2.1 Venture Capital Evolution 11 2.2.2 Venture Capital Life Cycle 12 2.2.3 Cleantech Venture Capital 13 Research methodology & data 15 2.3.1 Data 15 2.3.2 Method 16 Results and discussion 18 2.4.1 The cleantech venture capital life cycle 18 2.4.2 Early Investment Stage 21 2.4.3 Commitment Stage 22 2.4.4 Institutionalization Stage 23 2.4.5 Overshooting Stage 25 X Table of Contents 2.4.6 Stabilization Stage 26 2.5 Conclusion 28 2.6 Acknowledgements 29 Private E uity in Clean Technology: An Exploratory Study of the Finance-Innovation-Policy Nexus 31 3.1 Introduction 31 3.2 Theoretical Background 33 3.3 3.4 3.5 3.6 3.7 3.2.1 Role of the finance eco-system for innovation 33 3.2.2 Public policy influence on the finance-innovation relationship 35 Method and Data 37 3.3.1 Research Context 38 3.3.2 Data Collection 40 3.3.3 Data analysis 42 Findings 44 3.4.1 Innovation policy (direct and indirect) effects 44 3.4.2 Financial policy (direct and indirect) effects 49 Discussion 53 3.5.1 Financing innovation beyond VC/PE – the role of institutional investors 53 3.5.2 Unintended policy consequences in financing industry emergence – the case of US and German cleantech markets 54 Conclusions and policy implications 56 Acknowledgements 58 Public policy influence on rene able energy investments – a panel data study across OECD countries 4.1 Introduction 59 4.2 Theoretical background 61 4.2.1 Public policy influence on renewable energy deployment 61 4.2.2 Investors’ perspective on renewable energies 64 ... chapter contributes to the research debate by incorporating the mobilization of finance for (cleantech) innovation Adding institutional investors as important actors shaping the conditions for innovation. .. service innovations can be green innovations (Caprotti, 2012; O’Rourke, 2009; Pernick & Wilder, 2007) © Springer Fachmedien Wiesbaden GmbH 2017 M Migendt, Accelerating Green Innovation, Innovationsmanagement... commercialization phase of innovations The other dissertations in contrast focus on the earlier innovation phase (generation - Dissertation Dr Friedemann Polzin) respectively later innovation phase